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TMF Taxes (or other knowledgable person),

I have a couple of questions regarding the taxing of long-term capital gains:

1) To qualify for long-term gains, how do you count to arrive at the year+1day requirement? In a tax booklet, I read that you start counting the day after the stock purchase, and stop on that day of the month 12 months later to determine you holding period. So, I bought a stock on 12/21/98; can I sell it on 12/22/99 and qualify for long-term gains, or must I wait until 12/23/99 to sell.?

2) Are long-term capital gains tax rates marginal rates? I am transferring some shares of stock to my 15-year-old daughter in a UGMA account. These shares have a large amount of long-term gains. and I plan to sell the shares immediately after the transfer. This will put her a little over the 15% income tax bracket cut-off. Will this cause all of the long-term gains on this stock to be taxed at 20%, or will most of it be taxed at 10%?

Your advise will be most appreciated.

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